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Suppose that the economy is currently operating at full employment as depicted in the graph to the right.Using the line drawing tool, show the effect on the economy if it were to run a federal budget surplus due to contractionary fiscal policy. Properly label this line.Carefully follow the instructions above, and only draw the required objects.Thus, in the short-run the economy will experienceA.arecessionarygap.B.aninflationarygap.Your answer is not correct.C.inflation.D.lowerunemployment.
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